Legal Question in Wills and Trusts in Florida

If I designate a beneficiary for my 401K or pension, can my estate demand funds from my beneficary to settle any outstanding debts I may have at the time of my death?

Asked on 5/08/12, 7:18 am

3 Answers from Attorneys

Ronald Jones Ronald A. Jones, PA

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As a general rule, no. See FS 711.509; but if the debt is owed to the bank or institution holding the 401k or Pension, they can 'set off' the debt by the funds they're holding. In other words if ABC bank is holding the 401K and it's payable on death to a beneficiary, but you've ALSO got a credit card or car loan owing to ABC bank, they might be able to take the money they're holding to pay off that debt. Capice?

Answered on 5/08/12, 7:26 am

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Lucreita Becude Lucreita D. Becude, P.A.

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I don't agree with Mr. Jones on this issue. When a person dies, the beneficiaries are NOT responsible for the debt. The Estate is. If there are no funds in the estate, then there is no way for them to collect. They can not withhold funds that are designated to a beneficiary as once the owner is deceased, the funds belong to the beneficiary who is NOT again I say, responsible for the debt.

Answered on 5/08/12, 7:58 am

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